ASCOTT RESIDENCE TRUST | BUY
TARGET PRICE: $1.16
JUNE 1 CLOSE: $1.135
DBS Group Research, June 1
Ascott Residence Trust (ART) announced that it has acquired its third property in Manhattan, DoubleTree by Hilton Hotel New York, Times Square South for US$106 million (S$146.9 million).
We are generally positive on the acquisition given the expected distribution per unit accretion as well as ART's increasing scale and exposure to the growing demand in New York on the back of various commercial developments and New York being a major tourist location. However, there is some uncertainty over future revenue per available room performance.
ASCOTT RESIDENCE TRUST | HOLD
TARGET PRICE: $1.17
JUNE 1 CLOSE: $1.135
UOB Kay Hian Research, June 1
Management confirmed that the target asset is a 3-4-star hotel, with 70 to 80 per cent of contributions stemming from leisure demand.
This potentially places it within industry disruptor Airbnb's sights. However, Airbnb's New York operations could be further curtailed by Mayor Bill de Blasio's US$2.9 million punitive action against illegal short-term apartment rentals below 30 days.
According to a spokesperson, Airbnb has removed 4,200 New York listings since 2015.
LIPPO MALLS INDO RETAIL TRUST | BUY
TARGET PRICE: $0.435
JUNE 1 CLOSE: $0.415
OCBC Investment Research, June 1
According to Bank Indonesia's Retail Sales Survey, real sales in Indonesia grew 4.2 per cent year-on-year in March and is expected to increase 5.4 per cent year-on-year in April, with the growth mainly driven by spending on food.
Indonesia's GDP grew 5 per cent year-on-year in Q1 FY17, and is expected to grow 5.1 per cent to 5.2 per cent year-on-year for 2017, according to recent comments by Bank Indonesia's deputy governor.
With occupancy costs within Indonesia relatively low, at about 10 per cent versus about 15 to 20 per cent in Singapore, and with retail spending continuing its upward trend, we remain positive on the medium-term potential (three- to five-year horizon) of Lippo Malls Indonesia Retail Trust (LMIRT) to continue achieving positive rental reversion rates.
The NPI yield of LMIRT's portfolio stands at 9 per cent. As of yesterday's price, LMIRT is currently trading at an 8.4 per cent FY17 forecast dividend yield and we find current levels attractive.
Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss arising from any use of the information published herein.